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Two analysts cut their price targets on the defense company.
While those reductions weren't drastic, they added to the generally downbeat post-earnings sentiment on the stock.
On the second-to-last trading day of the week, investors weren't willing to go on offense with defense stock Leonardo DRS (NASDAQ: DRS). On the back of two bearish post-earnings adjustments by analysts, its shares were sliding by almost 6% in late-session action. That was a notably steeper drop than the S&P 500 index's 0.6% decline at that point.
This came one day after Leonardo DRS released its third-quarter earnings, and that wasn't a coincidence. A pair of pundits tracking the company's fortunes weighed in with price target cuts in their reevaluations of its potential.
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Both Morgan Stanley's Kristine Liwag and Truist Securities's Michael Ciarmoli got out the scissors on Thursday.
Each snipped $2 from their previous price target for a new level of $45 per share for Liwag and $47 for Ciarmoli. The two pundits continued to differ on the stock's attractiveness, however, with Liwag maintaining her hold recommendation and Ciarmoli standing firm on his buy.
It wasn't immediately apparent why the two analysts clipped their price targets, but the reaction mirrors that of the broader market on Wednesday -- the day Leonardo DRS's released those quarterly numbers.
Although the company is benefiting from beefed-up defense spending globally and beat on the consensus revenue and earnings numbers, it feels like investors were expecting even more of a blowout quarter. The bar has been raised high for defense stocks lately, after all.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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